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Exam 4: Completing the Accounting Cycle

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Question 91

True/False

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The accumulated depreciation account is closed to the income summary account.

A) True
B) False

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Question 92

Multiple Choice

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After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of the debit and credit columns are $38,755 and $32,735, respectively. What is the amount of net income or net loss for the period?

A) $6,020 net income
B) $38,755 net loss
C) $6,020 net loss
D) $32,735 net income

E) A) and B)
F) A) and C)

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Question 93

True/False

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At the end of the fiscal period, prepaid expenses are reported on the income statement as expenses.

The balance in the capital account on the worksheet will equal the amount presented in the balance sheet.

On September 1, the company pays rent for twelve months in advance and debits an asset account. At year end, the adjusting entry on the work sheet would

During the end-of-period processing which of the following best describes the logical order of this process

The work sheet is a working paper that accountants can use to summarize adjusting entries and the account balances for the financial statements.

Which of the following account groups are all considered nominal accounts?

On the work sheet, the capital and drawing account balances are extended to the Balance Sheet columns.

Closing entries are entered directly on to the work sheet.

Prepaid Insurance is an example of a current asset.

The end-of-period spreadsheet (work sheet) for the current year for Jamal Company shows Balance Sheet columns with a debit total of $614,210 and a credit total of $630,430. This is before the amount for net income or net loss has been included. In preparing the income statement from work sheet, what is the amount of net income or net loss?

A post-closing trial balance should be prepared before the financial statements are prepared.

Closing entries

When preparing the statement of owner's equity, the beginning capital balance can always be found

Use the following information in the adjusted trial balance for Stockton Company to answer the following questions. Determine the Owner's Equity ending balance for the period.

The drawing account is a temporary account.

The worksheet

The following accounts appear in an adjusted trial balance of Brock Pool Service Company. Indicate whether each account would be reported in the (a) current assets, (b) property, plant, and equipment, (c) current liabilities, (d) long-term liabilities, or (e) owner's equity section of the December 31, 2010, balance sheet of Brock Pool Service Company.

The following are steps in the accounting cycle. Of the following, which would be prepared last?